The Ann Arbor Area Community Foundation (AAACF) now offers short-term loans of up to $ 50,000 each for local nonprofits that may be running out of funds due to the COVID-19 pandemic.
The loans are intended to cover the operations of an agency for up to 180 days at 0% interest. Applying nonprofits must demonstrate their ability to repay the money, which could be through future grants already committed or other sources of income.
Neel Hajra, CEO of AAACF, said nonprofits will have at least one year to repay loans and AAACF will work with each agency on a specific payment plan.
Hajra says the loans will expand the reach of AAACF to support more local nonprofits during this health crisis. The foundation has been working on a loan model for years and decided now is the best time to implement it.
“If not during a seizure, then when?” Hajra said. “Citizens are living through extraordinary circumstances and there are many non-profit organizations involved in the life of Washtenaw County. What are all the steps we can take to help?
Hajra recognizes that loans are a different type of funding than most nonprofits are used to, and anticipates that there will be nonprofits that would be better supported by a grant.
“This is meant to relieve the stress of a nonprofit organization, not to add the stress of paying off a loan,” Hajra said. “This is why we want to make sure that the organization has the financial means to accept this loan. We know that it will also be a process of adaptation and learning.”
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Photo courtesy of the Ann Arbor Area Community Foundation.